Extension of the period of availability of CDMA data transmission technology used by the PocketECG system in the U.S. territory
Current Report No. 11/2019
Date: 6 May 2019
Legal basis: Article 17(1) of MAR – inside information
The Management Board of Medicalgorithmics S.A. (“Company” or “Issuer”) announces that on 6 May 2019, a subsidiary of the Issuer, Medi-Lynx Cardiac Monitoring, LLC (“Medi-Lynx”) entered into a new contract with its existing provider of telecommunication services (“Contract”). The Contract concerns the provision of data transmission services to Medi‑Lynx. The services are used by the PocketECG system manufactured by the Company, and the system is used by Medi‑Lynx to provide health services in the U.S. territory.
As far as the Company knows, CDMA-based data transmission services, which are now used by a large number of PocketECG devices in the U.S. territory, were planned to be discontinued and replaced with LTE technology by 31 December 2019. Therefore, and considering the fact that LTE technology offers an increase in data transmission speed and bandwidth, the Company launched a development project to adapt the PocketECG system to the new LTE-based data transmission standards. These development efforts, started in Q2 2018, will result in a new version of the product: PocketECG IV LTE.
Under the Contract, the provider of telecommunication services has guaranteed the availability of CDMA-based data transmission until 31 December 2022. The existing contract did not provide such guarantee. With this arrangement, the Company will have more time for the development and certification of a new version of the product and gradual replacement of currently used (CDMA-based) PocketECG hardware with LTE-compatible devices. At the same time, the hardware replacement cost estimated at about PLN 6 million (six million zlotys) will not be borne by Medicalgorithmics Capital Group as an one-off expense in 2019, as assumed previously – but gradually, until the end of 2022.
The Parties have agreed that the new Contract is effective retrospectively from 24 April 2019.